TRG Arts is a data-driven consulting firm that teaches arts and cultural professionals a patron-based approach to increasing sustainable revenue. In this guest blog, David Brownlee Director of International Strategy introduces a new major study highlighting the impact of Covid-19 on philanthropic giving to the arts.
David Brownlee Director of International Strategy, TRG Arts
In March 2020 advance ticket sales fell off a cliff as venues shut. In the United Kingdom the cliff was steeper and deeper than in North America, but in both the effect on this key revenue stream was fundamental.
Many box office teams did an amazing job in encouraging patrons not to opt for a refund, but instead to move their booking into the future or to leave a credit on their account. Some organisations also reported customers donating the value of their cancelled tickets. Could a silver lining of the Covid-19 crisis be an increase in philanthropic support for the arts?
Alongside our partners at Purple Seven (UK arts data specialists) we have just released the first major study which compares the impact of Covid-19 on philanthropic giving to performing arts organisations in North America and the UK.
Using almost real-time data from 105 not-for-profit organisations of all scales the US, Canada and the UK, the report reveals there has been no aggregate growth in donations in 2020 in either North America or the UK. However, some individual organisations, particularly ones with a lower initial ratio of contributed income, have seen substantial increases in gift revenue.
Key findings from North America
- After a strong start to the year compared to 2019, North American aggregate individual donations dropped in March before recovering in April, falling significantly in May and then performing well in June.
In the first six months of 2020:
- Overall donations have fallen by just 2% from the same period in 2019.
- 33% of North American organisations reported increased donations, and 11% reported growth of over 100%.
- Overall giving has been sustained thanks to an increase in the value of very large gifts ($100K+).
- Gifts of over $100K accounted for 46% of all contributed revenue, up from 36% for the same period in 2019.
Key findings from the UK
In the first six months of 2020:
- The value of aggregate gifts in the UK has decreased by 12% compared to the same period in 2019.
- Gifts of over £80K accounted for 69% of all contributed revenue, up slightly from 68% during the first six months of 2019.
- 50% of UK organisations reported increased donations, 29% reported growth of over 100%, and 11% reported growth of over 400%.
Even in an unparalleled crisis, organisations that invest in building relationships with loyal audiences are best placed to weather the storm. In 2020, as in 2019, the most loyal ticket purchasers also contributed the most in donations with further growth in the proportion of contributed revenue from ‘Super Active’ customers, particularly in the UK.
In North America, a small number of very large gifts has kept overall giving at a similar level to the first six months of 2019. In the UK, some organisations, particularly those with a low historic base, have used the crisis as a springboard to build giving. Almost a third of organisations doubling the value of their gifts is some good news to celebrate in a very challenging world.
But how much of a difference will this make? The study highlighted the fundamental differences in business models on both sides of the Atlantic. In 2019 in North America for every $1 earned in ticket sales a further $1.19 was generated from gifts. In the UK the ratio was £1 in ticket sales to just 9 pence (£0.09) in gifts.
Has your organisation seen an increase in gifts in 2020? If so, what types of customer are showing their support? How is your performance compared to your peers? You can answer these questions with the free TRG Benchmark Dashboard. It’s quick and easy for Spektrix users to sign up and take part: visit https://go.trgarts.com/benchmark. An automated data feed between your box office and Purple Seven’s secure servers provides a daily update on ticket sales, refunds and donations which is anonymised and aggregated for the national benchmark.